PANAMA CITY BRACES FOR VIOLENCE; FACTIONS RALLY TODAY

PANAMA CITY, Panama -- Dultidio Gonzalez is not a man given to hasty judgment or political grand standing. He is one of the oldest leaders of Panama's oldest political parties.

But on Wednesday the 70-year-old businessman resigned from the Liberal Party he has supported for more than half a centurty, a gesture both significant and symbolic of Panama's political crisis.

"It made me sick to do it," he said at the offices of his family's construction business. "But I couldn't stay with a system where white handkerchiefs are confronting machine guns."

He was referring to the civil disobedience movement that has motivated thousands of Panamanians to wave handkerchiefs and bang soucepans twice a day in a geture of defiance.

The opposition plans to go beyond white handkerchiefs at a protest rally today, and observers fear there is potential for violence.

Despite a presidential decree prohibiting all demonstrations, the opposition National Civil Crusade has scheduled a rally for this afternoon at a downtown church.

Minister of Government and Justice Rodolfo Chiari De Leon, in a letter to Gen. Manuel Antonio Noriega, asked that the Defense Forces, "take any action necessary to make sure the presidential order is carried out."

The rally promises to further polarize the government from its growing number of oppositors.

Gonzalez is so far the only Liberal Party leader to make a definitive break with the government. But the party's directorate, including Panamanian Vice Presdent Roederick Esquivel, on Wednesday issued a strongly worded statement echoing the demand of the country's increasingly militant opposition.

The party called on President Eric Arturo Delvalle to appoint a special commission to investigate charges of murder, corruption and electoral fraud against top military commander Gen. Manuel Antonio Noriega.

The statement also condemns the activities of "paramilitary and extreme lefitist groups" who have been accused of attacking demonstrators and condemned the "absence of the authorities" during recent attacks on the U.S. Embassy and private busineeses owned by oppositors.

The use of violence by pro-government forces has alienated many businessemen like Gonzalez who over the past 18 years has been willing to cooperate with military rulers and their surrogates.

Now these businessmen are finding themselves increasingly isolated in a country where the middle clases are overwhelmingly opposed to a de facto military regime.

"The fathers may still be with the government," said Gonzalez referring to his former colleagues with the governing coalition. "But their sons and daughters are all out on the streets waiving white handkerchiefs in protests."

The National Democratic Union, a six-party coalition that won the 1984 election is still -- theoretically -- intact. But pro- and anti-government sources say both the Liberal Party and Delvalle's Republican Party are divided over whether or not to withdraw from the government.

The majority party within the governing coalition is the Democratic Revolutionary Party (PRD), created by the military in 1978 to promote the "revolutionary" politics of the late Gen. Omar Torrijos.

Torrijos, an astute and charismatic poitician, managed to bring former Communist Party members into his movement without alienating moderate businessmen.

But now many moderates fear that the leftist "tendency" within the party is gaining strength.

PRD leaders deny Marxists are gaining strength within the party, but they say the government must return to the populist policies of Torrijos.

"The PRD made the mistake of allowing Delvalle to drift away from Torrintismo," said Mario Rognoni, a television commentator and PRD leader. "It's time to return to more populist policies."